Execs hope to test online music idea at schools

August 03, 2003|By Jon Healey, Tribune Newspapers: Los Angeles Times.

Record-industry executives and online music companies are quietly working with colleges and universities to offer legitimate sources of free or deeply discounted music to students if the schools agree to take steps to deter piracy on campus networks.

The goal is to give students a carrot to go along with the stick being waved by the Recording Industry Association of America, which has been cracking down on music piracy with lawsuits. An online music service picked by a university would let students play a wide array of songs at little or no cost, potentially curtailing the use of hotbeds of unauthorized file-sharing services like Kazaa.

The fledgling online music services involved in the talks are eager to boost their profile among college students and see discounts as a way to hook new customers who will eventually pay full fare.

"This is a great opportunity to tap into this university base, show them the promise of digital music, show them the compelling digital offerings," said Peter Csathy, president and chief operating officer of San Diego-based Musicmatch Inc.

The discussions are still in an early stage, though several executives said they hoped to launch a trial run by early next year. The biggest hurdle seems to be winning over college administrators, who aren't as motivated as record companies and music services to wean students from piracy.

Many music industry executives blame the prolonged slump in CD sales on online piracy, particularly on file-sharing networks that enable users to download music, movies and other digital media for free from one another's computers.

The most active users of those systems tend to be college students using high-speed campus computer networks. And many universities are paying for their students' love of file sharing: Campus networks have been clogged by file-sharing traffic and network administrators have been forced to respond to a steady stream of complaints from movie and music firms about illegal downloading.

Still, when university officials were first approached about putting the online jukeboxes on their networks, they weren't convinced it was necessary, said Peter Fader, a marketing professor at the University of Pennsylvania's Wharton School, a longtime advocate of bringing legitimate services to campus at discounted rates.

"Part of it was that they weren't yet feeling the real heat," he said. "So unfortunately, it will come down to when the threats are large enough, either legal or financial. Then it will happen."

The record companies have been prodding colleges and universities for more than a year to do more to discourage file sharing, but that won't be easy. A study released Thursday by the Pew Internet & American Life Project found that 80 percent of the full-time students surveyed who downloaded or shared music online didn't care whether it was copyrighted.

The RIAA and Hollywood studios are exploring technologies universities could use to deter unauthorized downloading. RIAA President Cary Sherman stressed that the jukebox initiative is a separate endeavor.

At least one music service, Roxio Inc.'s Pressplay, has been wooing colleges for about a year. And one or more of the record companies are introducing university officials to online music company executives.

People involved in the discussions say the aim is to provide all students with a basic online music service that would allow them to play songs on demand from an extensive online jukebox. The cost, typically $5 to $10 a month, would be waived, discounted or buried in the students' activities fees.

If they wanted to buy songs to burn onto CDs or transfer to portable MP3 players, they would pay $1 or less per track.